In an official statement, the bank said the RBI acknowledged its efforts to diversify the loan book but flagged the need for further progress. The regulator has advised Ujjivan to reapply after achieving a more balanced and diversified portfolio.
Brokerage firm Kotak Institutional Equities has maintained a ‘Buy’ rating on Ujjivan SFB, with a price target of ₹72 per share. The brokerage said that while the outcome is clearly not favourable, the regulator has not flagged any concerns related to governance, compliance, or operational soundness.
Kotak added that its investment thesis did not factor in any potential benefit from the bank’s transition to a universal bank.
Accordingly, it has retained its ‘Buy’ rating, while remaining watchful of any sharp changes in the asset mix strategy in response to the RBI’s feedback.
The bank had originally submitted its application in February last year as part of its long-term growth strategy. The transition to a universal bank remains a key objective, aimed at expanding its business mix, improving the share of secured loans, and gaining greater operational flexibility along with access to a wider customer base.
Ujjivan added that it will continue to work on diversifying its portfolio and will reapply in due course, in line with the RBI’s guidance.
To qualify for a universal banking licence, lenders must meet several criteria, including listing on a recognised exchange, maintaining a minimum net worth of ₹1,000 crore, meeting capital adequacy norms, posting profits in the last two financial years, and keeping asset quality ratios within prescribed thresholds.
Shares of Ujjivan Small Finance Bank ended Monday’s session 0.33% lower at ₹60.10, though the stock has gained over 19% in the past month.
